Some Candidate Cities are Just Oversaturated for MLS

Discussion in 'MLS: Expansion' started by AmeriSnob, Apr 1, 2012.

  1. AmeriSnob

    AmeriSnob Member

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    This is a copy/paste of my post in the YBTD thread (which I regretfully derailed)

    This PDF file is a list of various cities, and their available disposable income. The idea is that a city needs a certain amount of money for a team to draw from in order to have a chance to be viable. The makers score each city out of 100 in their ability to hold a team, with only a score of 100 being a truly viable city.

    But triplet1 argued that we should be going for a higher number, namely $38 billion, the number needed to support an NHL team. I agree with a much higher standard than $16B, but maybe not that high. triplet1 also wrote that this should be the first question asked of an expansion city before anything else. If a market is oversaturated (negative available dollars) or simply doesn't have enough money (we'll say $25-30B as a minimum) it should be disregarded. Then we get this:

    TL;DR If we eliminate candidate cities that cannot financially support a team, we are left with Miami, Orlando, NY2 and Carolina all being viable teams, but none of the other candidate cities are.

    I am posting this here not to just advance an opinion; I am searching for facts more than anything. Is there a better way to gauge possible candidate cities? I am not looking for a passionate argument, but an objective one. I could care less which city gets it as long as it is a success.
    chungachanga and soccersubjectively repped this.


  2. colombia10

    colombia10 Red Card

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    What city on that list has 100 for NBA, NHL, MLB, and MLS yet has neither a NBA, NHL, MLB nor MLS team?

    The only one is Tulsa.

    Yet liberal midwest cities like Tulsa aren't even being given merit on these forums. There is literally no competition in Tulsa, you're going against a WNBA team and a Division 2 college football team.
  3. AmeriSnob

    AmeriSnob Member

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    Tulsa is an underserved city for sure, and one I've not looked at. But it is only the 54th largest TV market. It is only when you combine Tulsa with OKC that you get in the top 30, and even then it is smaller than Orlando, the smallest of the acceptable candidate. So while it has potential for success fanbase-wise, the city adds little value to the league's TV footprint.

    TV markets are especially important for the league today, since improving ratings is a top priority of the BoG. I'd put Tulsa/OKC in that second list of mine.
  4. colombia10

    colombia10 Red Card

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    If you expect expansion to be a solution to better tv ratings be prepared to be dissapointed.


  5. Zxcv

    Zxcv Member

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    Completely irrelevant. The MLS will not consider potential candidates if they don't meet their TV market size criteria. How plainly do they have to spell it out?
  6. triplet1

    triplet1 BigSoccer Supporter

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    AmeriSnob refers to this in his first post, but here is the decision making model I proposed for MLS expansion:

    1. Is there enough disposable income in the market to support a new MLS team?

    If the answer is "no", you stop right there. If the answer is "yes", you move to question 2, which is:

    2. Will those potential customers buy what MLS is selling?

    Here's where you need a good market study. Again, RB and Chivas USA appear to struggle at the gate not because there aren't enough fans with enough money to buy the tickets, but because not enough people are buying what they are selling.

    Still, if the conclusion is "yes", the final question IMO is:

    3. Beyond the Expansion Fee, will this new team add value to the rest of MLS?

    Here's where you start looking at TV markets, IMO, along with corporate sponsorship and free media opportunities.

    So, while there is sufficient personal income in Providence to support a team and a market study may indicate people would buy the necessary tickets for it to survive, is there really a pressing need to add the 52nd largest TV market to the mix given it's between New England and New York? Probably not.

    If MLS can answer yes to each of these questions, I think it makes sense to add a team. Remember though, MLS is under no compulsion at this point to add any team. It doesn't have to reach just to make up the numbers for a league, and it shouldn't.

    But as with any decision making system, you need to answer the questions in order because each represents a hurdle that must be cleared. Having enough people with enough money to buy your product is a basic threshold question. So, if there isn't the disposable income, the team isn't viable for the long term without league support and there is no reason to go further.

    If there is the requisite income but the team can't sell its product and persuade customers to use that income to buy tickets, again, it isn't going to be viable and there is no reason to go further.

    Mistakes are made when a league desires to add to it's "footprint", but ignores the perils of the first two threshold questions IMO.
  7. AmeriSnob

    AmeriSnob Member

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    Exactly. There are a lot of places with zero competition in Montana, for example, but who's gonna watch? For Tulsa to succeed they'd need to do everything right a la RSL and Columbus.

    I also do see expansion as a somewhat helpful way of expanding the leagues national footprint, which in turn helps gain more viewers. The southeast and Florida would watch more nationally televised MLS matches if they both had any sort of team to support, for example.
  8. Kayak

    Kayak Member+

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    I think your argument is a good one, but I like to look at hard support numbers when possible; I've posted this before but here are the support averages at all levels under MLS with the Carolinas in bold.

    5,033 UC Santa Barbara
    4,551 Akron
    4,194 Saint Louis
    4,093 Maryland
    3,861 Louisville
    3,593 Creighton
    3,177 Connecticut
    2,841 Indiana
    2,719 Clemson
    2,322 New Mexico
    2,156 Wake Forest
    2,011 North Carolina

    Charlotte also got 4,038 for an exhibition against North Carolina.

    NASL

    11,507 Montreal Impact
    3,769 Ft. Lauderdale Strikers
    3,353 Carolina RailHawks
    3,010 FC Tampa Bay
    2,866 Atlanta Silverbacks
    2,161 Puerto Rico Islanders
    1,817 FC Edmonton
    1,676 NSC Minnesota Stars

    USL

    5,415 Orlando City
    5,139 Rochester Rhinos
    4,053 Wilmington Hammerheads
    3,501 Charleston Battery
    1,986 Richmond Kickers
    1,406 Harrisburg City Islanders
    1,189 Antigua Barracuda FC
    1,127 Pittsburgh Riverhounds
    1,022 Charlotte Eagles
    819 FC New York
    661 Dayton Dutch Lions
    440 Los Angeles Blues
    190 River Plate Puerto Rico
    105 Puerto Rico United
    101 Sevilla FC Puerto Rico

    I made this post last year I'm interested to see what this year brings; if anyone can make an argument that there is better support for the sport through all levels in a region that doesn't have an MLS team I'd be surprised. Now I understand that it's unfair to judge certain cities on this basis Indiana does well at the college level but doesn't have a pro team in Indianapolis; St. Louis didn't have a pro team that was ran well. It's really hard to judge SEC country by this metric with only Kentucky and South Carolina fielding teams. That said I like to go by what we have and Carolina looks pretty viable in terms of people that will spend money to watch the sport.
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  9. AmeriSnob

    AmeriSnob Member

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    And that speaks to what a team can do with the money they're given to draw on. For example, Columbus and RSL, as triplet1 put it, "do everything perfect" which is why they as small markets punch above their weight, while New York and Chivas could do much better. One could say the Railhawks and Battery also "do everything perfect," though I don't know much about those teams' front offices. A Carolina team definitely has the potential to punch above its weight in ways that Columbus and RSL might not be able to because of their market sizes.
  10. evangel

    evangel Member+

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    Charts like these are the reasoning behind Garber's desire for a second NYC team. Those numbers are incredibly high. There is twice as much money available in NY than in second place LA.
  11. triplet1

    triplet1 BigSoccer Supporter

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    That's right.

    Let's apply those charts to existing MLS teams because I think it's interesting.

    This data suggests that there are three (and I'd argue four) markets that are saturated:

    Denver -$92.5 billion
    Kansas City -$57.07 billion
    Salt Lake -$9.75 billion
    Columbus $16.44 billion

    I include Columbus because if Stan's right (and I think he is), it really does take a lot more than $16 billion to sustain MLS at its current and future level. Whether that's an NHL number of about $38 billion, as he suggests, or something close to that could be debated, but I'd argue if the number was reset and Ohio State was factored in, that Columbus is negative or slightly negative.

    So, that's the group.

    If you look back at attendance or Forbes values, I don't think it's a coincidence that Columbus, Colorado and Kansas City have historically struggled -- they have very little margin for error in those markets. Essentially, when there isn't enough disposable income to go around, these teams either have to convince people to dig deeper (that is, really get an extraordinary commitment from those communities to dedicate more of their discretionary spending towards MLS than is typical) or take those dollars away from something else, be it another team or activity that currently commands that money.

    Hard choices.

    For a period, each of them has been able to do it, but this is a long haul and they have to replicate that year after year, decade after decade. And I think every organization would tell us that isn't easy.

    (As an aside, this data illustrates why some of the commentary in the attendance thread often strikes me as very unfair; the fact of the matter is that teams like Colorado or Columbus have to work much harder for comparable numbers then, say New England or Chicago or New York because their markets are so shallow, and their performance should be evaluated in light of those realities).

    If you believe this data, I think it's appropriate to consider how many more congested markets with insufficient disposable income does MLS want where you know they have even less margin for error than, say, Philadelphia or Houston or even Montreal does?

    Is it wise for MLS to invest in "shallow" markets where the pool of disposable income isn't very deep, even if it may be possible to struggle and make it work after a fashion?

    Why do that now that the league has a nucleus of apparently healthy teams?

    One more point, you will note that Green Bay has a negative number, but despite the Packers longevity it provides cold comfort to those who think disposable income doesn't matter IMO. The fact is, a team in Green Bay, Wisconsin doesn't work. In fact, it never has. It was obvious by the 1930s that Green Bay would struggle to maintain an NFL team, which is why the NFL forced them to play games in Milwaukee and effectively "regionalize" their fan base -- they enlarged the market to capture more disposable income -- and even then revenue sharing has been crucial to the Packers survival. Those are the remedies for a shallow market.

    But they've got to pull the money from somewhere.
  12. AmeriSnob

    AmeriSnob Member

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    One caveat that I must correct for: The available disposable income numbers account for the current teams in that market. So Columbus, for example, has $16 billion AFTER accounting for the Crew and Blue Jackets. I was wondering why one number was lower than the other, and that's what I haven't thought of until now. So Columbus is actually in better shape than the other three in that list, and in fact undersaturated (but not enough to warrant another MLS team, or any other sports team for that matter: keep in mind that number does not includ OSU). I'll fix my post to account for this later today. This means that cities that already teams can support multiple teams (for example, a city with $90B in disposable income and no non-sports competition can realistically support 3 MLS teams).
  13. HailtotheKing

    HailtotheKing Member+

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    San Antonio meets your arbitrary cut off, with a few billion to spare (actually, within half a billion of Orland). Why aren't they financially able to support the team ? Especially given you're saying Carolina is ...
  14. AmeriSnob

    AmeriSnob Member

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    They are, but as far as I know they're not in the running for the next team, are they? Have MLS officials made any gesture toward San Antonio that they have Carolina, Orlando, etc? Have they met with rich people in the area or held a press conference or met with your supporters groups? If I'm wrong, I'm wrong, but that's why I have them in my second list (though IMO the top team in that second list).
  15. HailtotheKing

    HailtotheKing Member+

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    SS&E (Spurs Sports and Entertainment) are actively engaged in trying to "bring a team to San Antonio" ... SA has all of the bases covered that you asked about and have had meetings/discussion with MLS brass going back 5+ years. Were it not for a certain political figure taking a dump on it, SA would most likely already be in the league.

    The hype around Orlando is exactly that ... hype. Honestly, go back more than 4-6 months and take a look at Orlando and MLS expansion and tell me what you get.

    SA has much more "stable" avenues for MANY if not all of the "key points" to this expansion business than any other city on a possible expansion list. The reason the talk has died down a tad is because SS&E is doing more due diligence because of the vote on the Alamo Stadium renovations.
  16. AmeriSnob

    AmeriSnob Member

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    If that's the case (and I honestly didn't know that but a quick google search proves it), then you're right. I'm gonna fix all this stuff up later today, probably removing the distinction between "candidate cities" and non-candidate cities and coming up with a real minimum number for disposable income.

    I don't know about Orlando being all hype though. The reason MLS didn't really talk to Orlando is because there was no one to talk to in Orlando until the arrival (and, you've gotta admit, great success) of Orlando City.
  17. AmeriSnob

    AmeriSnob Member

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    So I'm altering my numbers because of my mistake on interpreting the available disposable income number. It, in fact, accounts for existing teams when I thought it did not. This means more cities may be viable, and that some cities may be able to pass our minimum standards several times, meaning they are at the maximum able to support more than one or two teams (I'll calculate this as well).

    We must also look for a minimum number for supporting an MLS team. Let's first find out how much the chart gives as a minimum number.

    Miami-Ft. Lauderdale has 1MLB+1NFL+1NHL+1NBA. Their number not accounting for the 4 teams is $236B, and their number after is $38B. So the 4 teams combined make $198B.

    Philadelphia has the same + 1 MLS team. Their number before the 5 teams is $274B, and their number after is $62B. So the 5 teams combine for $212B. Take away the $198B for the other 4 teams and you get 1 MLS team = $14B in available disposable income, which is lower than our original interpretation of $16B.

    So we know this is the case for other cities, let's apply the test to Boston, which also has 5 teams, turning $248.86B to $37.27B. The 5 teams once again combine for about $212B, meaning the Revs account for $14B.

    With this, the following cities pass the triplet1 first test:
    Akron, Albany, Albuquerque, Bethlehem (PA), Austin, Baton Rouge, Birmingham, Boston, Bradenton, Bridgeport-Stamford, this list goes on, and isn't really helpful. We simply cannot consider all these cities, since it doesn't really help us so much.

    One way of narrowing this list is by setting a minimum metro area population. First, we want no market smaller than RSL at #50. For some instances we can add two or more nearby cities as the same "market" as we did with Carolina initially. Out of the top 50, we eliminate Atlanta, San Francisco-Oakland, Detroit, Phoenix, Minneapolis-St. Paul, San Diego, St. Louis, Tampa-St. Pete's, Baltimore, Denver, Pittsburgh, Cincinnati, Cleveland, Charlotte, Kansas City, Charlotte, Indianapolis, Nashville, Milwaukee, Jacksonville, Memphis, OKC, New Orleans, Buffalo, and Salt Lake City.

    These cities cannot support an MLS team, or in cases where there is one, cannot support a 2nd team. In fact, Denver and Kansas City were way oversaturated pre-MLS. It is no surprise these teams have struggled for so long. This is truly a testament to Sporting's owners, who have found such great success despite having the odds supremely against them. Colorado is also a success story given their extremely low glass ceiling (they are $-92B!). Some fun findings include the fact that NY can theoretically support as many as 41 more teams, if all their available disposable income goes to these teams.

    Which of those cities are salvageable, given their ability to draw money from nearby cities? I went over Carolina, saving Charlotte (you can thank Columbia, SC for that). Anyone want to make the argument that those cities can draw money from nearby cities in order to make them viable? Just add the numbers from the group of cities you think will support a single team and see if they add up to at least $14B. If they do, they're minimally viable. With this new measure, Birminham becomes the only other city to be viable for MLS (though barely, at #49 for TV markets).

    Cities without an MLS team that are still alive include: Miami, Riverside, Sacramento, Orlando, San Antonio, Las Vegas, Charlotte, Austin, Virginia Beach, Providence, Louisville, Richmond, Oklahoma City, Hartford, Raleigh/Cary and Birmingham. We can also include Columbia (SC) as part of a Carolina team.

    New York qualifies as well and so do many cities with a team, but only NY is actually being considered, so let's just eliminate anyone else with a team.

    We can also eliminate the obvious. That is to say the cities with no history of negotiations with MLS nor a notable fan-driven effort to get a team. So goodbye Riverside, Virginia Beach, Providence, Louisville, Richmond, Hartford, and Birmingham.

    We now have, in order of market size, New York, Miami, Sacramento, Orlando, San Antonio, "Carolina," Las Vegas, and Austin. We're left with the same seven as the last list as probable future expansion sites, though those in the list above this can enter this one if potential owners start getting MLS' attention.

    If we were to look at Canadian cities, only Ottawa would be top 50 in TV markets, and it has $17B in available disposable income. It is added to our list.

    TL;DR in order for a city to be a true candidate it must have $14B in available disposable income, at least 1.1 million metro population, and a history of negotiations with MLS. Only 8 US cities and Ottawa qualify.
  18. triplet1

    triplet1 BigSoccer Supporter

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    Actually, I think the data shows Orlando, San Antonio, Miami et. al. are all pretty thin.

    Let's look at the numbers. This report assumes $13.45 billion of discretionary income is needed to support an MLS team. Below, I've set forth the available discretionary income and subtracted the amount needed for an MLS team (in billions):

    San Antonio

    Available Discretionary Income -- $34.40
    Less MLS -- (13.45)
    Remaining -- $20.95

    Orlando

    Available Discretionary Income -- $34.95
    Less MLS -- (13.45)
    Remaining -- $21.50

    Miami

    Available Discretionary Income -- $38.96
    Less MLS -- (13.45)
    Remaining -- $25.51

    San Antonio is the tightest of the bunch. How tight? Well, Columbus has about $16.44 billion left over (after accounting for the Crew), which has proven to be tight. If you look at more recent expansion teams, Vancouver has $28.85 in disposable income (after accounting for the Whitecaps), Portland has $36.76 left over after accounting for the Timbers and Montreal has $63.49 left now that the Impact are playing (again, subtract 13.45 from the disposable income figure in the report to get that number).

    Point is, the most recent expansion teams have a lot more cushion of available personal income than would San Antonio (or Orlando for that matter).

    The reason the cushion matters is Stan's earlier point -- the figure $13.45 billion is probably now too low for what MLS is (and is becoming). Again, he suggested the NHL number of about $38 billion because (I suspect) he assumed like the NHL, MLS teams rely on their local market (ticket sales and match day revenue) for a disproportionate amount of their income. If the goal is to fill up an 18,500 - 20,000 seat stadium, it probably takes more discretionary revenue than $13.45 billion -- maybe double that or more.

    If an MLS team needs closer to $25 billion plus, suddenly the cushion I've set forth above is under real stress. There's little (if any) left.

    Which is why, to me, none represent a slam dunk opportunity for the league.
  19. AmeriSnob

    AmeriSnob Member

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    Further corrections to be made. From bizjournals, the makers of the chart:

    "Minimum income bases were estimated to be $85.4 billion for MLB, $37.6 billion for the NHL, $36.7 billion for the NFL, $34.2 billion for the NBA, and $15.4 billion for MLS." Let's take these numbers.

    So that doesn't knock out anyone still, but just putting this here for clarity's sake.
  20. triplet1

    triplet1 BigSoccer Supporter

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    Hmmm.

    Well, something is wrong. Note that Jacksonville has available income of $14.33 billion, which the chart says is enough -- 100 percent of the needed income -- for an MLS team. If $15.4 billion is required for an MLS team following the numbers you just posted, Jacksonville shouldn't have a 100 capacity score, it should be a 93.

    Likewise, look at Edmonton which, at $12.65 billion has 94% of the capacity it needs for an MLS team according to the chart -- that would mean that $13.45 billion is needed for an MLS team, which is the number I used above. If the number really is $15.4 billion, the capacity score should be closer to 82.

    What am I missing?
  21. Goforthekill

    Goforthekill Member

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    This list is amazing. we should make a list of the cities with a score of 100 for MLS and then thin out the list to the remaining viable candidates based on ownership, stadiums, fan base, Etc. it's a very good point to look at that some, Many, cities have three or four major sports teams already in place, and the list didn't even count colleges. but this chart is flawed in some ways, if a city already had 4 major sports they gave a 0 for MLS or anther sport. i think there are areas that still have the population and the fans to support 5 it's been done and is being done right now.
  22. evangel

    evangel Member+

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    Just to point this out, this chart seems to take into account data from before 2011, so it doesn't reflect the relocations and expansions that took place over the last year.

    Montreal should have its MLS team taken into account, though for our purposes that isn't relevant.

    What is relevant is the relocation of Atlanta's NHL team to Winnipeg. That freed up quite a lot of entertainment dollars in Atlanta.

    The available income should now be $37.6 billion (from the NHL team) + $4.73 billion (which is what they had before), for a total of $42.33 billion. This alone places Atlanta near the top of the list.

    If we take just this data into account, this would be a similar situation to what happened in Seattle. Seattle, with its NBA team, was technically not a city capable of taking in an MLS team, and if you look at Seattle on the list, notice how its NBA capacity score is only an 86. That would be even lower if we allocated a lot more than $14 billion in income to MLS (and in Seattle's case it's absolutely necessary to do so).
  23. Mr. Warmth

    Mr. Warmth Member+

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    It's clear you know nothing about Tulsa.

    1) It's far from Liberal. It's a regular and well served stop annually for Glenn Beck shows.

    2) The University of Tulsa Golden Hurricane is a Division I/FBS level school

    3) Beyond that, OU & OSU football dominate local sports coverage above both TU, WNBA Shock & the NBADL 66'rs.

    Anything else you'd like to be updated on?

    Far from it. See above. Not to mention Tulsa is currently bereft of billionaires who are interested in Sports.

    Tulsa has absolutely no public support for any type of cooperative public funding for any sports facilities and the residents of the largest suburb are too busy fighting (and losing) a major land use issue over an Indian casino that they think is going to pollute the minds of their children.

    Tulsa is a waste of your attention at this point unless the Muscogee (Creek) Nation decides to buy a franchise to align with one of their casinos.

    OKC is a mildly better option, simply because of the potential ownership groups of the Nichols Family (Devon Energy), Aubrey McLendon (Chesapeake Energy) & Clay Bennett (Dorchester Capital/OPUBCO) & the Wards (Sandridge Energy) as well as a number of more than willing people who like to be minority owners of things and stuff, coupled with OKC having no problem as of late taxing itself for community development and redevelopment of it's downtown area (MAPS 1/2/3) as well as for public facilities for attracting sports team investment. There is plan currently being developed plan for an option area to be reserved for a potential 20/30K sized stadium as the endpoint of the Core to Shore redevelopment.

    Tulsa's best bet would be George Kaiser & Family, but they seem to be a lot more into philanthropy of things of actual benefit to Tulsa, rather than sports teams.
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  24. OnlyOneTInFootball

    OnlyOneTInFootball Member

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    Did your study take into account the fact no one apart from some die-hards went to or watched on TV Thrashers games?

    A new MLS club only needs three things.
    a) an owner with deep pockets
    b) a SSS or at very least stadium plan where the club controls the revenue
    c) a market where enough people will watch television.
  25. triplet1

    triplet1 BigSoccer Supporter

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    Nielsen TV Homes Estimate 2011

    1 New York 7,515,330
    2 Los Angeles 5,666,900
    3 Chicago 3,502,610
    4 Philadelphia 3,015,820
    5 Dallas-Ft. Worth 2,594,630
    6 San Francisco-Oak-San Jose 2,523,520
    7 Boston (Manchester) 2,460,290
    8 Atlanta 2,407,080
    9 Washington, DC (Hagrstwn) 2,389,710
    10 Houston 2,177,220
    11 Detroit 1,883,840
    12 Phoenix (Prescott) 1,881,310
    13 Seattle-Tacoma 1,874,750
    14 Tampa-St. Pete (Sarasota) 1,795,200
    15 Minneapolis-St. Paul 1,753,780
    16 Miami-Ft. Lauderdale 1,580,580
    17 Denver 1,572,740
    18 Cleveland-Akron (Canton) 1,526,200
    19 Orlando-Daytona Bch-Melbrn 1,453,120
    20 Sacramnto-Stkton-Modesto 1,409,400
    21 St. Louis 1,258,580
    22 Portland, OR 1,197,780
    23 Charlotte 1,166,180
    24 Pittsburgh 1,160,820
    25 Raleigh-Durham (Fayetvlle) 1,131,310

    http://www.nielsen.com/content/dam/corporate/us/en/public factsheets/tv/2010-2011 DMA Ranks.pdf



    Tulsa is 61 BTW.

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